Retailer sell off drags down London indexes

A retailer sell off caused by concerns over a pull back in spending amid a tight cost of living squeeze led London’s top indexes lower today.

The capital’s premier FTSE 100 index dropped 0.34 per cent to 7,587.70 points, while the domestically-focused FTSE 250 index, which is more aligned with the health of the UK economy, dropped 1.2 per cent to 21,100.73 points.

High street and luxury retailers were the worst performers in the City as investors ditched holdings in the sector over concerns they could be hit by an expected slowdown in spending in the year ahead.

High street retailer JD Sports was among the worst performers on the FTSE 100, dropping 5.1 per cent.

Fashion retailer Next lost 3.8 per cent, while luxury goods firm Burberry had 3.43 per cent shaved off its share price.

Economists expect Brits to cut back on discretionary spending amid the worst fall in living standards since the mid-1950s, according to the Office for Budget Responsibility.

Experts have slashed growth forecasts for the year ahead on fears over the spending cool down.

Concern about a rapid tightening from the US Federal Reserve also weighed on market sentiment.

Meanwhile, on the FTSE 250, retailers also drove the morning’s losses.

Card maker Moonpig fell over seven per cent, while Marks and Spencer lost 4.74 per cent.

Housebuilders offset some of the losses on the FTSE 100, building on this week’s rally triggered by reports of the sector being let off the hook for a £4bn cladding bill by the government.